According to a new study released by Arta Finance, 38% of Gen Z are currently experiencing a "midlife crisis."

But they're not alone. Facing similar struggles, 36% of Millennials say they're also in crisis. The concept of a midlife crisis has changed, and for today's young adults, the pressures of financial instability, mental health, and career uncertainty have created an environment that feels inescapable.

For many, the biggest factor contributing to this crisis is money. For Gen Z, 30% report that financial issues are their primary source of stress, while 28% of Millennials feel the same. With rising costs of living, an unpredictable economy, and stagnant wages, Gen Z and Millennials are grappling with financial pressures that are fundamentally reshaping how they think about their futures. For example, the average cost of living has increased by 28.3% over the past decade, while wage growth has remained relatively flat.

What’s Fueling the Crisis?

Beyond just the numbers, money represents freedom, opportunity, and stability—all things that feel out of reach for many young people today. In comparison, only 15% of Baby Boomers surveyed reported similar financial stress during their early adulthood, highlighting the changing economic landscape.

Beyond financial stress, other factors play a significant role. Mental health challenges (25%) and career struggles (23%) contribute substantially to Gen Z’s sense of crisis, according to the survey. Millennials, meanwhile, are wrestling with the broader economic environment (27%) and their mental health (27%). Unlike previous generations, these issues are deeply connected to how young people see themselves and their futures.

Coping Mechanisms

Both generations are finding ways to cope with the uncertainty, such as exploring new hobbies and interests; 26% of respondents said they’re picking up activities that help them find a sense of purpose.

One in five Gen Zers experiencing a midlife crisis is splurging on nonessentials — like clothing, electronics, and entertainment .Social media often influences this behavior, which creates pressure to keep up with trends and lifestyles portrayed online. These short-term bursts of joy might help in the moment, but they could ultimately worsen financial stress, creating a vicious cycle.

Millennials are also reacting to their crises by making significant changes. The survey found that about 30% of them have changed careers in search of something more fulfilling, while 28% have dipped into their savings — a move that can provide temporary relief but may jeopardize their long-term financial goals.

Missing Milestones & Lagging Behind

Financial strain has meant that both Gen Z and Millennials are missing out on significant milestones. For example, homeownership rates among Millennials are lower compared to Baby Boomers at 30 years old, with only 42% owning homes compared to 51% of Boomers. Many are putting off buying homes, delaying starting families, or avoiding significant life changes because of their financial situation. The generational comparison is stark: 55% of Gen Z and Millennials think their parents had it easier when it came to achieving these milestones. The struggle to build financial security is not just an individual issue.

The consequences of this financial pressure are evident in how young people are living their lives.

A 2023 study from Harris Poll for Bloomberg showed that about 45% of people aged 18-29 lived at home with their families, an 80-year high, and more than 60% of Gen Z and Millennials said they moved back home between 2021 and 2023. Many are staying in unfulfilling jobs, taking on more debt to keep up, or staying at home with their parents longer than they’d like simply because they can’t afford to make a change. These coping mechanisms might help in the short term, but they also mean that many young adults are putting their dreams on hold.

The Most Important Priorities

Despite the challenges, Gen Z and Millennials are still holding onto work-related aspirations. For many, earning more money and establishing successful careers is the most important thing right now. These goals aren’t just about achieving status. They’re about building a future where financial stability allows them to live life on their own terms.

Reflect and Act

The financial and emotional struggles faced by Gen Z and Millennials are real, but they don’t have to be permanent or a crisis. One actionable step is to start by using financial planning tools, which provide insights into budgeting, saving, and investment opportunities. There are pathways to greater stability and steps that can be taken to start moving in the right direction.

"The midlife crisis that so many young people are experiencing is about more than just money; it's about the sense of control that money represents. For Gen Z and Millennials, skyrocketing asset prices and the flood of often-misleading advice on social media have amplified their anxiety,” said Samita Malik, a financial advocate at Arta Finance. “The key to addressing this crisis is to listen to their concerns and provide clear, actionable financial advice, enabling them to establish a solid foundation for growth and long-term stability."

For many young adults, a financial midlife crisis is a call to action—an opportunity to rethink priorities and embrace change. Start small, stay informed, and build the future you envision.

Methodology

This survey was conducted online by TEAM LEWIS on behalf of Arta Finance between August 13 and August 23, 2024. Survey respondents were provided by OpinionRoute and Cint and included 2,000 U.S. consumers above the age of 18, weighted to be census representative in age and gender​.